saw his premium go from $ 600,000 to $ 1.4 million in just one year .

“ Even for someone who can afford to live in a $ 100 million home , that ’ s a huge nut to swallow year after year ,” she says .

HUB defines someone ’ s net worth by their portfolio of insurable assets . Someone with assets valued at $ 3 million or more is considered to be a high-net-worth individual , while someone with $ 20 million or more is ultra-high-net-worth . Their insurable assets would include homes , cars , watercraft , art collections and jewelry .

Some participants in the HUB survey say they have responded to the skyrocketing premiums by redefining what they consider to be “ sufficient ” coverage . Most , the report said , are engaging in some kind of self-insurance , often by raising their deductible or dropping riders , in order to reduce the premium . In the last 18 months , Frattarola says she ’ s been asking clients and their financial advisors more often if they have a robust enough balance sheet to support rate increases every year .

In situations where there is no longer coverage available , a growing number of the affluent are choosing to fully self-insure . While that can look like a reasonable option , the report emphasized that they are placing a lot of responsibility on themselves . They would not benefit from the things insurers offer — carriers issue warnings when major weather events are imminent , for example , and mobilize recovery vendors and contractors to repair damage .

Financial advisors have told her that their clients have been making decisions about where to live , how big a home to buy , or how close to the water they can be , all in order to make sure that year to year they have dedicated cash to pay for their insurance premiums . sations with their clients . “ As the years go on , financial advisors , either at RIAs or wirehouses , are doing a better and better job . Because ultimately our mandate and mission is consistent with theirs ,” she says . “ Particularly with a high-net-worth or ultra-high-net-worth client segment , that mission is really around preservation of assets .” That planning might furthermore require an international outlook , Frattarola says . Affluent U . S . citizens often own

Affluent families said they were engaging in some kind of self-insurance for their property , often by raising their deductible or dropping riders , to reduce the premium .

The insurance problem might also affect many planned migrations that are popular among retirees . “ That traditional move , oftentimes from the Northeast and going to Florida for a friendlier tax environment , isn ’ t necessarily all upside anymore , given the increase of insurance cost ,” she says .

In general , she thinks financial advisors of all stripes have become more diligent about incorporating these issues and risk management into their conver-

property in other countries , and so even a regional financial advisor might need an international risk manager ’ s expertise .

“ More and more , our clients are getting secondary or tertiary passports . They ’ re buying homes abroad . They ’ re thinking about diversification of geographic risk ,” she says . “ They want to work with someone who really does understand the nuances of their wealth and how to mitigate some of that risk .”

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JANUARY / FEBRUARY 2025 | FINANCIAL ADVISOR MAGAZINE | 53